If bitcoin becomes to mainstream and becomes too regulated, the need will emerge for less regulated and more anonymous coins.
I believe if there will be attempts to regulate, it will apply to all cryptocurrencies
Topic: Why won't BTC drop in Value when Mainstream? - page 2. (Read 4769 times)
I believe if there will be attempts to regulate, it will apply to all cryptocurrencies
Availability != Supply
More people selling gold does not increase the supply of gold.
The increased availability may reduce the marginal price, but this will be very minor compared to the real price.
It will likely reduce volatility though.
More people selling gold does not increase the supply of gold.
The increased availability may reduce the marginal price, but this will be very minor compared to the real price.
It will likely reduce volatility though.
I think what OP is getting at is that there will be a perceived decrease in scarcity when there are more readily-available outlets for people to trade in Bitcoin. Now you sort of have to know someone who knows someone or know the secret handshake. The amount of work or knowledge necessary to obtain Bitcoin will in fact decrease. The cost to obtain Bitcoin (separate from its trading value) will go down.
A good analogy for why this doesn't match up with reality is this:
Imagine a store that sells only one thing. Lets say it is hot cocoa. This store is at the top of a big hill which is surrounded by trees and covered in snow. Everyone in the town near the hill is shivering and cold, because they have never heard of hot cocoa. One person climbs to the top of the hill, which is very difficult because the snow is deep and the hill is treacherously steep. That person gets to the top and the proprietor of the store has four steaming hot cups of cocoa, which the proprietor offers him at a dollar per cup.
The climber, however, has left his wallet at home. He fishes through his pockets and finds a dime. He says, "sorry, that's all I've got." The proprietor looks around, sees he has no other customers and is unlikely to sell any of his cocoa, and says, "what the heck, no one wants this stuff anyhow" and sells the cocoa for a dime.
The next day, the climber brings three friends, and they've all brought their wallets. It's a tough climb to the top but everyone gets to the cocoa store and spends a dollar on the hot cocoa. Everyone feels so much better after a lifetime deprived of hot cocoa that on the way down they start shoveling a trail through the snow to make it easier to get to the top of the hill.
The following day, there are eight people. The trail made climbing the hill much easier. They all get to the top, but there are only four new cups of cocoa. The first four people get their cocoa, and when it comes to the fifth, they ran out. So one person without cocoa offers one of the people with cocoa a dollar for half of their cup of cocoa. The first people in line dole out half their cocoa, make their dollar back, and think, awesome! I just got my cocoa for free!
A few months later, there is a road going to the top of the hill and regular bus service. Everyone wants cocoa and it's not hard to get to the store anymore. The proprietor is trying his best to make as much cocoa as he can but even hiring a couple of people to help he can't make more than a hundred cups of cocoa because the cocoa machine only makes one cup at a time. But four hundred people are visiting every day because everyone knows where the cocoa shop is and how much better it feels to shiver in your wintry fairytale existence with a belly full of cocoa, and no one has to work hard at it, just hop on the bus.
Um. Then the writer realized he'd spent a half hour of his life on a stupid fable about cocoa. A half hour he'll never get back.
The moral of the story is: some people, like me, ought not be allowed on the Internet.
The end.
A good analogy for why this doesn't match up with reality is this:
Imagine a store that sells only one thing. Lets say it is hot cocoa. This store is at the top of a big hill which is surrounded by trees and covered in snow. Everyone in the town near the hill is shivering and cold, because they have never heard of hot cocoa. One person climbs to the top of the hill, which is very difficult because the snow is deep and the hill is treacherously steep. That person gets to the top and the proprietor of the store has four steaming hot cups of cocoa, which the proprietor offers him at a dollar per cup.
The climber, however, has left his wallet at home. He fishes through his pockets and finds a dime. He says, "sorry, that's all I've got." The proprietor looks around, sees he has no other customers and is unlikely to sell any of his cocoa, and says, "what the heck, no one wants this stuff anyhow" and sells the cocoa for a dime.
The next day, the climber brings three friends, and they've all brought their wallets. It's a tough climb to the top but everyone gets to the cocoa store and spends a dollar on the hot cocoa. Everyone feels so much better after a lifetime deprived of hot cocoa that on the way down they start shoveling a trail through the snow to make it easier to get to the top of the hill.
The following day, there are eight people. The trail made climbing the hill much easier. They all get to the top, but there are only four new cups of cocoa. The first four people get their cocoa, and when it comes to the fifth, they ran out. So one person without cocoa offers one of the people with cocoa a dollar for half of their cup of cocoa. The first people in line dole out half their cocoa, make their dollar back, and think, awesome! I just got my cocoa for free!
A few months later, there is a road going to the top of the hill and regular bus service. Everyone wants cocoa and it's not hard to get to the store anymore. The proprietor is trying his best to make as much cocoa as he can but even hiring a couple of people to help he can't make more than a hundred cups of cocoa because the cocoa machine only makes one cup at a time. But four hundred people are visiting every day because everyone knows where the cocoa shop is and how much better it feels to shiver in your wintry fairytale existence with a belly full of cocoa, and no one has to work hard at it, just hop on the bus.
Um. Then the writer realized he'd spent a half hour of his life on a stupid fable about cocoa. A half hour he'll never get back.
The moral of the story is: some people, like me, ought not be allowed on the Internet.
The end.
This is great and I think it's applicable to the bitcoin economy. We're currently in the process of paving that path, but we still don't know how many people will venture across it and whether or not there'll be an oversupply of cocoa.
I think what OP is getting at is that there will be a perceived decrease in scarcity when there are more readily-available outlets for people to trade in Bitcoin. Now you sort of have to know someone who knows someone or know the secret handshake. The amount of work or knowledge necessary to obtain Bitcoin will in fact decrease. The cost to obtain Bitcoin (separate from its trading value) will go down.
A good analogy for why this doesn't match up with reality is this:
Imagine a store that sells only one thing. Lets say it is hot cocoa. This store is at the top of a big hill which is surrounded by trees and covered in snow. Everyone in the town near the hill is shivering and cold, because they have never heard of hot cocoa. One person climbs to the top of the hill, which is very difficult because the snow is deep and the hill is treacherously steep. That person gets to the top and the proprietor of the store has four steaming hot cups of cocoa, which the proprietor offers him at a dollar per cup.
The climber, however, has left his wallet at home. He fishes through his pockets and finds a dime. He says, "sorry, that's all I've got." The proprietor looks around, sees he has no other customers and is unlikely to sell any of his cocoa, and says, "what the heck, no one wants this stuff anyhow" and sells the cocoa for a dime.
The next day, the climber brings three friends, and they've all brought their wallets. It's a tough climb to the top but everyone gets to the cocoa store and spends a dollar on the hot cocoa. Everyone feels so much better after a lifetime deprived of hot cocoa that on the way down they start shoveling a trail through the snow to make it easier to get to the top of the hill.
The following day, there are eight people. The trail made climbing the hill much easier. They all get to the top, but there are only four new cups of cocoa. The first four people get their cocoa, and when it comes to the fifth, they ran out. So one person without cocoa offers one of the people with cocoa a dollar for half of their cup of cocoa. The first people in line dole out half their cocoa, make their dollar back, and think, awesome! I just got my cocoa for free!
A few months later, there is a road going to the top of the hill and regular bus service. Everyone wants cocoa and it's not hard to get to the store anymore. The proprietor is trying his best to make as much cocoa as he can but even hiring a couple of people to help he can't make more than a hundred cups of cocoa because the cocoa machine only makes one cup at a time. But four hundred people are visiting every day because everyone knows where the cocoa shop is and how much better it feels to shiver in your wintry fairytale existence with a belly full of cocoa, and no one has to work hard at it, just hop on the bus.
Um. Then the writer realized he'd spent a half hour of his life on a stupid fable about cocoa. A half hour he'll never get back.
The moral of the story is: some people, like me, ought not be allowed on the Internet.
The end.
A good analogy for why this doesn't match up with reality is this:
Imagine a store that sells only one thing. Lets say it is hot cocoa. This store is at the top of a big hill which is surrounded by trees and covered in snow. Everyone in the town near the hill is shivering and cold, because they have never heard of hot cocoa. One person climbs to the top of the hill, which is very difficult because the snow is deep and the hill is treacherously steep. That person gets to the top and the proprietor of the store has four steaming hot cups of cocoa, which the proprietor offers him at a dollar per cup.
The climber, however, has left his wallet at home. He fishes through his pockets and finds a dime. He says, "sorry, that's all I've got." The proprietor looks around, sees he has no other customers and is unlikely to sell any of his cocoa, and says, "what the heck, no one wants this stuff anyhow" and sells the cocoa for a dime.
The next day, the climber brings three friends, and they've all brought their wallets. It's a tough climb to the top but everyone gets to the cocoa store and spends a dollar on the hot cocoa. Everyone feels so much better after a lifetime deprived of hot cocoa that on the way down they start shoveling a trail through the snow to make it easier to get to the top of the hill.
The following day, there are eight people. The trail made climbing the hill much easier. They all get to the top, but there are only four new cups of cocoa. The first four people get their cocoa, and when it comes to the fifth, they ran out. So one person without cocoa offers one of the people with cocoa a dollar for half of their cup of cocoa. The first people in line dole out half their cocoa, make their dollar back, and think, awesome! I just got my cocoa for free!
A few months later, there is a road going to the top of the hill and regular bus service. Everyone wants cocoa and it's not hard to get to the store anymore. The proprietor is trying his best to make as much cocoa as he can but even hiring a couple of people to help he can't make more than a hundred cups of cocoa because the cocoa machine only makes one cup at a time. But four hundred people are visiting every day because everyone knows where the cocoa shop is and how much better it feels to shiver in your wintry fairytale existence with a belly full of cocoa, and no one has to work hard at it, just hop on the bus.
Um. Then the writer realized he'd spent a half hour of his life on a stupid fable about cocoa. A half hour he'll never get back.
The moral of the story is: some people, like me, ought not be allowed on the Internet.
The end.
I'll take basic economics for 100, Alex.
It is indeed basic supply and demand. Bitcoin is intrinsically a deflationary currency since its supply is fixed at 21 million. Does that mean its price will go up in the future? Only if demand continues to grow to outpace supply, and that's not a given.
Bitcoin has been around for a few years and it hasn't yet proven itself valuable enough for consumers. Merchants are incentivized to adopt it due to the low fees and no chargebacks, but what does the "average Joe" benefit from, as compared to traditional fiat money? Not much.
In fact, since its existence, bitcoin has been used extensively for speculation, gambling, drugs, and pornography because it provides much added value in those fields: instant and anonymous transactions, low fees, etc. But the value of a currency is only as good as its usability in trade/commerce, and instant and anonymous transactions don't add much value in the world of (traditional) e-commerce.
A more creative model must be found for bitcoins in e-commerce, and until then, bitcoin's value will be based on pure speculation and will keep the "average Joe"s out. Indeed, why would the "average Joe" go through the trouble of adopting a currency that's based on Cryptographic Hash Functions (??), Proof of Work (??), and Public/Private Keys (??)? These terms are not very accessible to the non-analytical mind.
Bitcoin has been around for a few years and it hasn't yet proven itself valuable enough for consumers. Merchants are incentivized to adopt it due to the low fees and no chargebacks, but what does the "average Joe" benefit from, as compared to traditional fiat money? Not much.
In fact, since its existence, bitcoin has been used extensively for speculation, gambling, drugs, and pornography because it provides much added value in those fields: instant and anonymous transactions, low fees, etc. But the value of a currency is only as good as its usability in trade/commerce, and instant and anonymous transactions don't add much value in the world of (traditional) e-commerce.
A more creative model must be found for bitcoins in e-commerce, and until then, bitcoin's value will be based on pure speculation and will keep the "average Joe"s out. Indeed, why would the "average Joe" go through the trouble of adopting a currency that's based on Cryptographic Hash Functions (??), Proof of Work (??), and Public/Private Keys (??)? These terms are not very accessible to the non-analytical mind.
wow, such a badly thought out argument!
I am playing Devil's Advocate by creating this thread. I don't necessarily believe what I am saying. And I hope I am wrong.
I am buying up BTC like wildfire, but I have always had this nagging fear that once "Average Joe" can get their hands on it with a simple click, its value will decrease.
Why?
Because I equate "supply" as increasing, when "average joe" is able to easily get bitcoin.
I am not talking about literal "supply" here. Im talking about *availability*.
I equate "insufficient supply" as the current status, where availability to the general public is extremely limited.
Right now BTC is not easy to get. Therefore "supply" (availability) is limited.
This has created "demand" among all of us. Not the general public.
That's why I said $100 is "our price" ..... $100 is what BTC has settled at for "our little world" of QT wallets and mining.
Later, when BTC becomes simple for the general public to acquire, because there are tools, websites, apps, which make acquiring it simple for the average person - SUPPLY increases.
Availability increases. Now anyone can get 10 BTC ....
No longer 10 internet geeks playing with BTC, now there are 10 internet geeks and 300 average joes who have it.
Increased availability.
Price goes down.
This is a temporary, not permanent thing. But I do believe it will happen when BTC goes mainstream at first.
I am buying up BTC like wildfire, but I have always had this nagging fear that once "Average Joe" can get their hands on it with a simple click, its value will decrease.
Why?
Because I equate "supply" as increasing, when "average joe" is able to easily get bitcoin.
I am not talking about literal "supply" here. Im talking about *availability*.
I equate "insufficient supply" as the current status, where availability to the general public is extremely limited.
Right now BTC is not easy to get. Therefore "supply" (availability) is limited.
This has created "demand" among all of us. Not the general public.
That's why I said $100 is "our price" ..... $100 is what BTC has settled at for "our little world" of QT wallets and mining.
Later, when BTC becomes simple for the general public to acquire, because there are tools, websites, apps, which make acquiring it simple for the average person - SUPPLY increases.
Availability increases. Now anyone can get 10 BTC ....
No longer 10 internet geeks playing with BTC, now there are 10 internet geeks and 300 average joes who have it.
Increased availability.
Price goes down.
This is a temporary, not permanent thing. But I do believe it will happen when BTC goes mainstream at first.
Sorry, you have it backwards. You should read a basic economics textbook. It's straightforward supply and demand. When demand goes up and supply stays the same (or in the case of bitcoin, goes up very slowly), price will go up.
People are presently not paying premiums to acquire bitcoins and they are certainly not scarce. You are confusing transaction cost with supply. The supply is not changing if the transaction cost goes down. In fact, as many others said here, if the transaction cost goes down, bitcoin price will only go up!
The price of bitcoin is actually too high if you consider the competition from other alt-coins, but people are seldom rational when it comes to economics.
Just like other technology wars or brand wars, the winner takes it all and thats why bitcoin has sustained the price around 100$.
Most people and most merchants ignore or don't know about alt-coins.
In the long run I think other coins will take some more market share and outperform bitcoin as an investment.
If bitcoin becomes to mainstream and becomes too regulated, the need will emerge for less regulated and more anonymous coins.
Just like other technology wars or brand wars, the winner takes it all and thats why bitcoin has sustained the price around 100$.
Most people and most merchants ignore or don't know about alt-coins.
In the long run I think other coins will take some more market share and outperform bitcoin as an investment.
If bitcoin becomes to mainstream and becomes too regulated, the need will emerge for less regulated and more anonymous coins.
Most people ignore alt coins because alt coins are worthless. Anybody can make an alt coin as easily as I can take a green piece of paper and write "1 dollar" on it. That doesn't make it money.
No longer 10 internet geeks playing with BTC, now there are 10 internet geeks and 300 average joes who have it.
That would be increased demand. Even if you want to play semantic games about "increased available supply" surely you can see that we are looking at increased demand under that scenario.
Now Bitcoin might not RISE further under increased demand simply because the current price has some "future expectations" built into it. It is possible that demand rises (but slower than some expect) and thus the price declines (less of a speculative) premium despite there being higher demand.
I am playing Devil's Advocate by creating this thread. I don't necessarily believe what I am saying. And I hope I am wrong.
I am buying up BTC like wildfire, but I have always had this nagging fear that once "Average Joe" can get their hands on it with a simple click, its value will decrease.
Why?
Because I equate "supply" as increasing, when "average joe" is able to easily get bitcoin.
I am not talking about literal "supply" here. Im talking about *availability*.
I equate "insufficient supply" as the current status, where availability to the general public is extremely limited.
Right now BTC is not easy to get. Therefore "supply" (availability) is limited.
This has created "demand" among all of us. Not the general public.
That's why I said $100 is "our price" ..... $100 is what BTC has settled at for "our little world" of QT wallets and mining.
Later, when BTC becomes simple for the general public to acquire, because there are tools, websites, apps, which make acquiring it simple for the average person - SUPPLY increases.
Availability increases. Now anyone can get 10 BTC ....
No longer 10 internet geeks playing with BTC, now there are 10 internet geeks and 300 average joes who have it.
Increased availability.
Price goes down.
This is a temporary, not permanent thing. But I do believe it will happen when BTC goes mainstream at first.
I am buying up BTC like wildfire, but I have always had this nagging fear that once "Average Joe" can get their hands on it with a simple click, its value will decrease.
Why?
Because I equate "supply" as increasing, when "average joe" is able to easily get bitcoin.
I am not talking about literal "supply" here. Im talking about *availability*.
I equate "insufficient supply" as the current status, where availability to the general public is extremely limited.
Right now BTC is not easy to get. Therefore "supply" (availability) is limited.
This has created "demand" among all of us. Not the general public.
That's why I said $100 is "our price" ..... $100 is what BTC has settled at for "our little world" of QT wallets and mining.
Later, when BTC becomes simple for the general public to acquire, because there are tools, websites, apps, which make acquiring it simple for the average person - SUPPLY increases.
Availability increases. Now anyone can get 10 BTC ....
No longer 10 internet geeks playing with BTC, now there are 10 internet geeks and 300 average joes who have it.
Increased availability.
Price goes down.
This is a temporary, not permanent thing. But I do believe it will happen when BTC goes mainstream at first.
Quite interesting this topic just above "Why do most Bitcoiners seem intelligent?" 
Key word ... most.
Quite interesting this topic just above "Why do most Bitcoiners seem intelligent?"
LOL 
It seems to me that the price of BTC right now ($100-ish) is "our" price.
BTC is hard to obtain. Only those of us who know how to acquire it, can get it.
Therefore its value is high.
The average person out there still has no means by which to obtain it.
To me that is "Scarcity".
To me that justifies its $100 value.
Fast forward a bit - to when people can obtain bitcoin easily.
Why won't its value take a sharp skydive when it is abundant, and easy to obtain?
Suddenly its not so hard to get.
Suddenly its not scarce.
Quantity of coins will also be going up. Even less scarcity.
Scarcity increases value. Easy to acquire decreases value.
No?
-Burger-
BTC is hard to obtain. Only those of us who know how to acquire it, can get it.
Therefore its value is high.
The average person out there still has no means by which to obtain it.
To me that is "Scarcity".
To me that justifies its $100 value.
Fast forward a bit - to when people can obtain bitcoin easily.
Why won't its value take a sharp skydive when it is abundant, and easy to obtain?
Suddenly its not so hard to get.
Suddenly its not scarce.
Quantity of coins will also be going up. Even less scarcity.
Scarcity increases value. Easy to acquire decreases value.
No?
-Burger-
Rather than "scarcity" , one possible perspective is look at Bitcoins from the point of the economic principles of Supply / Demand.
When Cypress bank accounts were being raided the price shot up, because "heck" there was a big demand , Cypriots were trying to get their money out of the country and used Bitcoins, so they bought Bitcoins as a store of value.
Cypriots demand drove the Bitcoins price up.
The same will happen as economic instability is increased around the globe. When people realize that they need to get their savings out of banks fast, and gold/silver is too heavy to carry around and unsafe (killed for it) they will discover Bitcoins and used it to store value, as more people subscribe to this idea the higher the price.
Argentina is also a good example. http://www.coindesk.com/why-bitcoins-are-60-more-expensive-in-argentina-than-the-us/
This is also well documented in the most recent "The Genesis Block" report.
http://thegenesisblock.com/bitcoin-mid-year-review-and-outlook/
Just like a hot stock on the stock market, when the demand is there people will drive the price up.
This can be said about more average joes and janes learning about Bitcoins and wanting to try it out and use it for exchange.
The more people get on the bandwagon the higher the price.....demand.
Think "Supply / Demand", but your are correct too that "scarcity" has some factor in it.
My 2 cents.
CryptoCoinMKT
Quite interesting this topic just above "Why do most Bitcoiners seem intelligent?"
The price of bitcoin is actually too high if you consider the competition from other alt-coins, but people are seldom rational when it comes to economics.
Just like other technology wars or brand wars, the winner takes it all and thats why bitcoin has sustained the price around 100$.
Most people and most merchants ignore or don't know about alt-coins.
In the long run I think other coins will take some more market share and outperform bitcoin as an investment.
If bitcoin becomes to mainstream and becomes too regulated, the need will emerge for less regulated and more anonymous coins.
Just like other technology wars or brand wars, the winner takes it all and thats why bitcoin has sustained the price around 100$.
Most people and most merchants ignore or don't know about alt-coins.
In the long run I think other coins will take some more market share and outperform bitcoin as an investment.
If bitcoin becomes to mainstream and becomes too regulated, the need will emerge for less regulated and more anonymous coins.
100% agree with this. Bitcoin paved the way and deserves credit for its accomplishments but you are right, there are improvements to be made and another coin will surely catch some notability.
The price of bitcoin is actually too high if you consider the competition from other alt-coins, but people are seldom rational when it comes to economics.
Just like other technology wars or brand wars, the winner takes it all and thats why bitcoin has sustained the price around 100$.
Most people and most merchants ignore or don't know about alt-coins.
In the long run I think other coins will take some more market share and outperform bitcoin as an investment.
If bitcoin becomes to mainstream and becomes too regulated, the need will emerge for less regulated and more anonymous coins.
Just like other technology wars or brand wars, the winner takes it all and thats why bitcoin has sustained the price around 100$.
Most people and most merchants ignore or don't know about alt-coins.
In the long run I think other coins will take some more market share and outperform bitcoin as an investment.
If bitcoin becomes to mainstream and becomes too regulated, the need will emerge for less regulated and more anonymous coins.
Bitcoins value will be the same as ever other thing in this world is based on, simply what someone will pay for it. Therefor bitcoin will never reach a million a coin or anything close to. Simply because no one will ever pay 1million for it.
You will always have other currencies accepted. Bitcoin will never be that needed for the price to go insanely high.
You will always have other currencies accepted. Bitcoin will never be that needed for the price to go insanely high.
BTC is hard to obtain. Only those of us who know how to acquire it, can get it.
The average person out there still has no means by which to obtain it.
To me that is "Scarcity".
To me that justifies its $100 value.
This is entirely backwards! The amount someone is willing to pay for something is at most its utility less the transaction cost. Reducing transaction costs therefore increases the amount people would be willing to pay.The average person out there still has no means by which to obtain it.
To me that is "Scarcity".
To me that justifies its $100 value.
But it also completely misses the big picture. The supply of Bitcoins is effectively fixed. The demand, however, is not. Increasing adoption means increasing demand.
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